The Ministry of Finance issued a notification on 19th July 2024, amending the Prevention of Money-laundering (Maintenance of Records) Rules, 2005. Key changes include the requirement for reporting entities to verify client identities using KYC Identifiers from the Central KYC Records Registry without asking clients to resubmit KYC records unless there is a change in information, incomplete records, expired documents, or the need for enhanced due diligence. Additionally, reporting entities must update KYC records within seven days or a specified period when informed of changes by the Central KYC Records Registry. The amendments also clarify the processes for filing, retrieval, and utilization of KYC records. These rules take effect from their publication date in the Official Gazette.
MINISTRY OF FINANCE
(Department of Revenue)
NOTIFICATION
New Delhi, the 19th July, 2024
G.S.R. 419(E).— In exercise of the powers conferred by section 73 read with sections 11A and 12AA of the Prevention of Money-laundering Act, 2002 (15 of 2003), the Central Government hereby makes the following rules further to amend the Prevention of Money-laundering (Maintenance of Records) Rules, 2005, namely:
1. (1) These rules may be called the Prevention of Money-laundering (Maintenance of Records) Amendment Rules, 2024.
(2) They shall come into force on the date of their publication in the Official Gazette.
2. In the Prevention of Money-laundering (Maintenance of Records) Rules, 2005 (hereinafter referred to as the principal rules), in rule 9,
(i) for sub-rule (1C), the following sub-rule shall be substituted, namely:
“(1C) For the purpose of verification of identity of a client, underclause (a) and (b) of sub rule (1) or on-going due diligence as per clause (iii) of sub-rule (12), the reporting entity shall seek the KYC Identifier from the client or retrieve the KYC Identifier, if available, from the Central KYC Records Registry and proceed to obtain KYC records online by using such KYC Identifier and shall not require a client to submit the same KYC records or information or any other additional identification documents or details, unless –
(a) there is a change in the information of the client as existing in the records of Central KYC Records Registry; or
(b) the KYC record or information retrieved is incomplete or is not as per the current applicable KYC norms prescribed by the respective regulator; or
(c) the validity period of the downloaded documents has lapsed; or
(d) the reporting entity considers it necessary in order to verify the identity or address (including current address) of the client as per the guidelines issued by the regulator under sub-rule (14), or to perform enhanced due diligence or to build an appropriate risk profile of the client”;
(ii) insub-rule (1D), for the words “as soon as possible”, the words “within sevendays or within such period as may be notified by the Central Government” shall be substituted;
(iii) after sub-rule (1G), the following sub-rule shall be inserted, namely :
“(1H) If an update in the KYC record of an existing client is informed by the Central KYC Records Registry to a reporting entity under sub-rule (1D), the reporting entity shall retrieve the updated KYC records from the Central KYC Records Registry and update the KYC record maintained by the reporting entity as per the guidelines issued by the regulator under sub-rule (14) and under clause (g) of sub-rule (2) of rule 9A.”
3. In the principle rules, in rule 9A, in sub-rule (2),in clause (g), for the word “filing”, the words “filing,
retrieval, and utilisation of” shall be substituted.
[F. No. P-12011/12/2022-ES Cell-DOR]
RIMJHIM PANDAY, Under Secy.
Note: The principal rules were published in the Gazette of India, Extraordinary, Part-II, Section 3, Sub-section (i) vide notification number G.S.R. 444 (E), dated the 1st July, 2005 and were last amended vide notification number G.S.R. 745(E), dated the 17th October, 2023.
